Architects look to their billings as predictor of economic trends
Pacific Business News (Honolulu) - February 23, 2007 by Harold Nedd Pacific Business News
Hawaii's architects could prove useful in forecasting the local economy.
At least that's what research from the Honolulu Chapter of the American Institute of Architects indicates.
The trade group, open to the state's 2,036 licensed architects, has found data on billings at architectural firms to be a strong predictor of such economic trends as future construction activity.
If that is the case, Hawaii's economy appears to be strong, at least for the near future.
The AIA chapter has found a nine-to-12-month lag from the time architects see commercial construction activity to when it shows up in bricks and mortar. They see residential projects coming down the pike five months ahead of time.
"We feel the upturns and the downturns first," said Peter Vincent, president of AIA's Honolulu chapter. "We're an early indicator of what's happening down the road."
Construction, both residential and commercial, is a more-than-$4.9 billion-a-year industry in Hawaii, according to research provided by the AIA's local chapter. It's a major component of the gross state product -- 7.2 percent of GSP in 2005 -- and a jobs generator.
The most common measures economists use to forecast construction activity are building permits and interest rates, which some say don't show a full enough picture of what will happen.
But outside experts such as Leroy Laney, a professor of economics and finance at Hawaii Pacific University, see potential in data on billings at architecture firms.
"It's not one of the more common indicators, but it's useful to look at," Laney said.
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